This is a raw idea and is likely to be subject to multiple rounds of revision.
When talking about systems, the term dynamics refers to how systems respond to perturbations. As system analysts, we are interested in two types of responses: the transient response and the steady state.
A transient response is the way in which a systems undergoes adaptation over some period of time immediately following the perturbation as it approaches its steady state. The steady state, on the other hand, does not necessarily mean that the system’s change over time is fixed; rather, it describes predictable state. Therefore, an oscillatory system is one which has predictable oscillations. For example, a siren has oscillations that are persistent in time meaning that its steady state nature is oscillatory.
Businesses are systems and similarly are subject to dynamical behaviour. It is therefore important that entrepreneurs pay attention to a businesses dynamical behaviour because through this it can control the experiences of all stakeholders.
The steady state of a business is essential to assure its investors and customers of predictability. In other words, a business must be profitable in its steady state. In the early days of the business there will be a lot of anxiety as to whether the pricing structure is good enough to lead to a sustainable endeavour. If we keep our prices fixed can we weather the response from our competitors?
By contrast, a business’ transient response is how it responds to changes in the economic environment. Ideally, a good business would be able to adapt quickly, isolating its stakeholders from unpleasant outcomes. For example, how will the business respond to changes in taxation policies, introduction of new competition, inflation in prices of key inputs, raiding of its staff and many other environment changes? It goes without saying that a well-run business would be robust.